JD Sports Fashion Plc another record result for the Group

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JD Sports Fashion Plc (LON:JD.), the leading retailer of sports, fashion and outdoor brands, today announces its interim results for the 26 weeks ended 4 August 2018 (comparative figures are shown for the 26 week period ended 29 July 2017).

	2018	2017	% Change
	£m	£m

Revenue	1,846.3	1,367.2	+35%

Gross profit %	48.2%	47.4%

EBITDA*	171.8	136.8	+26%
Depreciation / amortisation	(47.9)	(33.5)

Operating profit	123.9	103.3	+20%
Net interest expense	(2.0)	(0.6)

Profit before tax	121.9	102.7	+19%

Basic earnings per ordinary share	10.05p	8.09p	+24%

Interim dividend payable per ordinary share	0.27p	0.26p	+4%

Net cash at period end (a)	(85.1)	222.7

a) Net cash consists of cash and cash equivalents together with interest-bearing loans and borrowings

b) Throughout this release ‘*’ indicates first instance of a term defined and explained in the Glossary at the end of these interim results

Group Highlights

· Another record result for the half year with Group EBITDA increased by 26% and profit before tax increased by 19%

· Encouraging total like for like sales* growth of more than 3% achieved against a backdrop of widely reported retail challenges in the UK

· Profitability in the core* UK and Ireland Sports Fascias further enhanced with margins increased

· International development of JD continues with:

a) Net increase of 18 JD stores across mainland Europe

b) Net increase of 21 JD stores in the Asia Pacific region including first stores in South Korea and Singapore and additional stores in both Malaysia and Australia

· Acquisition of Finish Line in the United States further significantly extends the Group’s global reach with a trial of the JD fascia anticipated to start in the second half

· A positive EBITDA maintained in the Outdoor fascias after a uniquely weather-challenged trading period

· Key financial information of the two business segments is tabulated below:

Period to 4 August 2018	Sports Fashion £m	Outdoor £m	Total £m

Revenue	1,638.1	208.2	1,846.3

Gross margin %	48.9%	43.1%	48.2%

EBITDA	168.9	2.9	171.8
Depreciation	(39.1)	(4.5)	(43.6)
Amortisation¹	(2.1)	(2.2)	(4.3)
Operating profit / (loss)	127.7	(3.8)	123.9

¹ This is a non-trading charge relating to the amortisation of various fascia names and brand names which arise consequent to the accounting of acquisitions made over a number of years. The increased charge in Sports Fashion relates to the amortisation of the Finish Line fascia name with the provisional fair value on acquisition of £71m being amortised over 10 years with a charge for one month (£0.6 million) applied in the period to 4 August 2018.

Period to 29 July 2017	Sports Fashion £m	Outdoor £m	Total £m

Revenue	1,170.6	196.6	1,367.2

Gross margin %	48.1%	43.3%	47.4%

EBITDA	130.3	6.5	136.8
Depreciation	(25.5)	(4.0)	(29.5)
Amortisation	(1.6)	(2.4)	(4.0)
Operating profit	103.2	0.1	103.3

JD Sports Fashion, Peter Cowgill, Executive Chairman, said:

“The Group continues to make excellent progress with the profit before tax for the 26 weeks ended 4 August 2018 increasing by a further 19% to £121.9 million. The increase in the operating profit of £20.6 million to £123.9 million includes a contribution of £4.8 million from Finish Line in the seven week period post acquisition.

“This is another record result for our Group demonstrating that our multibrand multichannel premium offer has resilient profitability in its core UK and Ireland market with capacity for continued growth across an increasing number of international markets.

“Against a backdrop of widely reported retail challenges in the UK, it is extremely reassuring that the profitability in the UK and Ireland Sports Fascias has been further enhanced. This reflects the value of the investments that we have made over a number of years in developing a dynamic multichannel proposition which marries the best of physical and digital retail enabling customers to interact with us where and when they want and through the channel of their choice.

“Sales to date in the second half have continued at similar levels to those in the first half supporting our continued confidence in the robustness of the JD proposition. We remain confident that we are well positioned to deliver an outturn in line with current market expectations which, including a part year from Finish Line, range from £337 million to £345 million and we also remain encouraged by our prospects for future growth.”

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